Withholding Tax Proclamation In Ethiopia Pdf Best [updated] Jun 2026

The new amendment introduced higher rates for domestic and international payments to improve revenue collection:

Applies to the supply of goods exceeding ETB 20,000 and services exceeding ETB 10,000 per contract. withholding tax proclamation in ethiopia pdf best

Regional states may have their own implementing regulations, but the federal proclamation is the benchmark. The new amendment introduced higher rates for domestic

Withholding tax is a type of tax that is deducted from an individual's or business's income at the source. This means that the payer of the income (e.g., an employer or buyer) is required to deduct a certain percentage of the income and pay it to the tax authority on behalf of the recipient. The recipient then reports this income on their tax return and claims a credit for the tax already paid. This means that the payer of the income (e

| Mistake | Consequence | | :--- | :--- | | Using 2002 Proclamation (10% on all contractor payments) | Under-withholding by 8% (since current rate is often 2%). Results in penalty of 100% of difference. | | Missing the 30-day remittance rule (old PDF said “end of year”) | Interest charged at 10% monthly. | | Ignoring exemptions for new manufacturing investors (introduced in 2016) | Over-withholding, causing cash flow problems for suppliers. |